HONG KONG – Agricultural export subsidies could be eliminated over the next eight years under a World Trade Organization agreement cobbled together Dec. 18 in a last-minute deal to keep WTO talks limping toward a possible 2006 end.
And Canada appeared to have won some breathing room in its attempts to protect both the Canadian Wheat Board monopoly and supply management over-quota tariffs.
“I think, from Canada’s point of view, we have made some good progress,” agriculture minister Andy Mitchell said in a Dec. 18 interview. “Obviously, the elimination of export subsidies is in the interests of Canadian exporters in terms of their competitive position.”
Read Also
Key actions identified to address canola tariffs
Federal and Saskatchewan governments discuss next steps with industry on Chinese tariffs
Canadian Federation of Agriculture president Bob Friesen agreed.
“I think Canada came out of this week quite well positioned,” he said in an interview after watching the talks from the sidelines, along with scores of other Canadian lobbyists, provincial ministers and officials. “I think minister Mitchell and the negotiators did a damn good job to negotiate enough flexibility to allow Canada to continue to fight for its positions.”
But even the modest commitments in the Dec. 18 deal are far from secure.
The European Union agreed to a 2013 end to export subsidies, with most of the cutting promised by 2010, only if a deal to reform food aid and state trading entity rules can be worked out in Geneva by the end of April.
Detailed agreement on subsidy, tariff and other liberalizing rules for all other issues at play in the WTO talks – including trade in industrial products, services, agricultural market access and domestic support – are supposed to be completed by the end of April 2006 to keep the negotiation on track for an end-of-year completion.
After four years, countries remain far apart on most of those sensitive issues.
Amid the self-congratulations in Hong Kong over a deal to keep negotiations going, some officials were conceding that it is possible Sunday’s deal after a rancorous six days of brinkmanship negotiations merely bought a reprieve before the talks run out of time next year.
All countries agreed to complete negotiations and complex implementation bargaining by the end of 2006 so a treaty can be put to the United States Congress before American “fast track” legislation expires in summer 2007.
There are serious doubts if it is realistic or even possible to complete negotiations on the “modalities” or reform commitments for all major issues in four months.
Not everyone accepts the idea that a deal must be made in 2006.
“Fast track is a pressure tactic the Americans always use,” said Mark Fried of Oxfam Canada. “So what if it takes a few more years to get it right? We’ll be living with this for a long time.”
The CFA’s Friesen echoed that view.
“We want a successful WTO outcome that works for all Canadian farmers,” he said. “I don’t think we should follow artificial deadlines that result in a bad deal just for the sake of a deal.”
Canadian trade minister Jim Peterson would entertain no thought of missing the new April 30 deadline, even though other deadlines in what was supposed to be a three-year negotiation ending in 2004 have been missed.
“What we have accomplished here today illustrates that we are prepared to make up for lost time,” he told an end-of-meeting news conference. “We have great willingness to see this go ahead and failure is not an option. We will have to work around the clock, starting in Geneva, in order to meet our deadlines at the end of April for modalities and I’m confident we can do it.”
In the Dec. 18 text, WTO countries agreed that for state trading entities such as the Canadian Wheat Board, the goal is to create rules that make sure monopoly powers are not used to engage in trade-distorting practices. There is no mention of the European Union and U.S. view that the monopoly itself is trade distorting, although they will continue to make the argument.
“This reflects the Canadian, Australian and New Zealand view that monopoly behaviour, rather than existence, is the issue,” CWB chair Ken Ritter said in an interview. “We are cautiously optimistic it means we will be able to allow western Canadian farmers and not the WTO to decide the future of the wheat board.”
The text also leaves open the debate over market access and the fate of Canada’s supply management over-quota tariffs. An earlier text had tied quotas on “sensitive products” to overall tariff reductions.
“From what I can tell, it looks like supply management dodged a bullet,” National Farmers Union president Stewart Wells said in an interview.
But Ontario farmer Liam McCreery, president of the Canadian Agri-Food Trade Alliance, complained that the lack of commitment on tariff reduction was a major failing of the deal. “We’re very disappointed with the lack of progress on market access on all tariffs, which is the key to benefits from increased trade liberalization.”
